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Major Retailers Fight To Stop Whole Foods From Expanding With Legal Fine Print

When Amazon first acquired Whole Foods earlier this year, it was reported as a major scare to the grocery industry because rivals feared that Amazon would dominate the competition. However, as time has progressed, several retailers, including Target, have found a way to stop Whole Foods from continuing to expand its reach: legal fine print.

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Photo: Mike Mozart on Flickr

When major retailers enter into leasing agreements, they often include language in their contracts designed to keep their largest competitors from being able to fully develop or even own space in the same building. An investigation by Reuters found several examples of this legal fine print that could be utilized to stop Whole Foods.

For example, a Target located in San Francisco’s City Center Mall stalled Whole Foods’ entry in the same building. It was done through clauses in their original contract that prevent pick-up lockers for goods ordered online from appearing in new tenants’ locations. Thus, Whole Foods would have to concede their Amazon locker availability if they want the space.

In Manhattan, several big box retailers have clauses that prevent Whole Foods from selling several items in Amazon’s inventory, including electronics and and linens, that they sell themselves. Other such clauses in other leases can include the prevention of pickup services or even naming competitors barred from opening stores in the same building.

Currently, Whole Foods owns 473 stores and plans to add 85 more. However, the Amazon-owned grocer will be facing many challenges to get into its new spaces based off of these leasing agreements, a new challenge for a technology-based company that’s making its first foray into brick-and-mortar. The full extent of these challenges is hard to determine, since lease deals vary based on the mall or location of particular stores and many are kept private.

Nonetheless, consider Amazon’s takeover of retail grocery via Whole Foods to be at least somewhat impeded… for now.

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Amazon Actually Increased Some Prices To Make Their Whole Foods Discounts Happen

After Amazon took over Whole Foods, one of their first moves was to discount a lot of the popular items in stores. We saw the dollars drop off of popular items like avocado, kale, milk, eggs, salmon, and steaks. While it definitely brought a lot more customers into Whole Foods and helped boost sales, there’s more to how those price cuts went down than meets the eye.

amazon whole foods discounts

Photo: Foodbeast/Constantine Spyrou

Research firm Gordon Haskett conducted an analysis of Whole Foods that found that Amazon actually increased prices on several items while their discounts have been happening. Between August 28th and September 26th, frozen food prices went up seven percent while snack foods went up five percent. Of the over 100 items surveyed by Gordon Haskett, about as many saw a jump up in prices (16) as the number of those discounted (17).

While Gordon Haskett didn’t analyze the entire store for total discounts (our own research saw at least 40 items with price cuts), it displays a pattern that reveals how Amazon was able to discount so many of these more popular items. Unfortunately, this model of swapping between discounts and markups isn’t just something that happens at Whole Foods, its prevalent across the entire grocery industry.

Supermarket analyst David J. Livingston told the Washington Post that everybody low-key marks up certain prices while discounts get marketed that customers take advantage of. “The over change is nil. Just like when a grocer claims to have lowered 5,000 prices.  What they don’t tell you is they raised prices on 45,000 items to pay for it.”

The discounts that Amazon rolled out definitely helped business boom at Whole Foods. The Post also reports that Whole Foods foot traffic has gone up by as much as 25 percent while sales increased by $1.6 million thanks to purchases.

However, Amazon’s claim of bringing lower prices to their new grocery business still stands. Overall, Gordon Haskett found that Whole Foods’ prices dropped 1.2 percent over the analyzed time period. Whole Foods does have prices that are about 15 percent higher than the average grocery store, according to Morgan Stanley. Thus, they still have plenty of catching up to do to meet the price points of their competitors.

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Amazon’s New Whole Foods Discounts Are Absolutely Insane

whole foods discounts

Image taken by Foodbeast/Constantine Spyrou.

Today officially marks the beginning of Amazon’s merger with Whole Foods. As part of the acquisition, Amazon already announced that some awesome Whole Foods discounts would start today. To learn exactly what those price drops are, we went to a local Whole Foods to see for ourselves.

In total, we found over 40 items in the store that featured the new Amazon discounts. As a word of caution, the store we visited is in Tustin, California. CNN has already listed price drops at a Whole Foods in New York, and we did find some differences between the two. Thus, the total discount amounts and/or prices may vary by location.

Image taken by Foodbeast/Constantine Spyrou

Millennials everywhere can rejoice knowing that Whole Foods’ avocados have dropped to $1.49 each.

Image taken by Foodbeast/Constantine Spyrou

The meat and seafood departments got some solid discounts as well. Atlantic salmon fillets are now down to $9.99 per pound from $13, and New York Strips and Boneless Rib Eye Steaks both dropped $3 to $13.99 per pound. Organic whole rotisserie chickens also plunged down to $9.99 from $13.99. Half organic rotisserie chickens are now $5.99, while conventional whole rotisserie chickens fell $1 to $7.99.

Image taken by Foodbeast/Constantine Spyrou

In the dairy department, cage free non-GMO eggs dropped to a mere $2.99 per dozen, while organic eggs are now $3.99. Smaller discounts are also available on butter and shredded mozzarella products.

Image taken by Foodbeast/Constantine Spyrou.

The best area to look for discounts in the store, however, is the bulk goods section. We tallied at least 30 items in this area that received price cuts. The biggest products to watch for here is the quinoa. Several different variants received discounts of at least $2 per pound, making this trendy grain a whole lot more affordable.

CNN has also found Amazon Echos for sale in a Whole Foods. While that wasn’t the case at the store we visited, the possibility of its availability there in the future is plausible.

On top of these discounts, Whole Foods is continuing to offer various sales on different products, so make sure to check your local store for those deals as well. If you want to find all of the Amazon Whole Foods discounts, look for orange signs like those in the above pictures.

With these new price drops, Whole Foods is well on its way to becoming more affordable and accessible to all. This is just the beginning of the Whole Foods and Amazon partnership, so the grocery industry should be ready for more from them in the near future..

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Amazon Just Slashed Whole Foods’ Store Prices, Will Give Discounts To Prime Members

amazon slashes whole foods prices

Photo: Mike Mozart on Flickr.

Amazon has finally closed its acquisition deal with Whole Foods, which means the corporate giant officially owns the grocery chain, effective Monday.

According to Amazon, the companies will work together to remove the “whole paycheck” connotation of Whole Foods, where it is often joked that consumers have to spend their entire paychecks in order to afford Whole Foods.

Amazon will immediately drop prices at Whole Foods starting Monday, and while not every single item will drop in price, “a selection of best-selling grocery items will,” according to a press release.

The release hints that organic bananas, eggs, avocados, baby kale, salmon, and more will be cheaper.

As Amazon slashes Whole Foods’ prices, they’ll be working on other collaborations as well, integrating their Prime technology into Whole Foods’ system. This means Whole Foods private label products will be available on Amazon’s grocery options, including Amazon Fresh and Amazon Pantry.

Amazon lockers will begin to pop up inside of Whole Foods stores, meaning you can buy food and pick up packages at the same time. Amazon Prime will also eventually become Whole Foods’ customer rewards program, as members will enjoy special savings and discounts as a result.

Amazon added that these price cuts would not translate to a loss of quality. Whole Foods will continue to uphold its welfare and food standards across the board, thus, more people can now afford the healthier, fresher food that this grocery chain provides.

Following Amazon’s news of the Whole Foods price cuts, grocery stocks tumbled once again. Kroger share prices fell as much as 8%, while Sprouts closed at a 6% drop, and Walmart shares fell 2%.

Amazon slashes Whole Foods prices as well as it slashes its competitors, it seems, and it could be big trouble for the grocery industry.

We’ll have to wait and see what the future of Amazon, Whole Foods, and other grocers entails. Until then, we’ll be enjoying the new price cuts at Whole Foods.